Merchandise inventory

In 2020 and 2021 our all products has been sold so we don’t have merchandise inventory
ending. At the end of the year 2022, 5 products remain unsold 97750*5 =488750 which become
our asset. In the year 2023, 6 products remain unsold 97750*6=586500 while in 2024, 8
products remain unsold 97750*8=782000.

Bad debt expense

In 2020, Bad debt expense is the 3% of total accounts receivable 1260000*3% = 37800 and A/R is 30% of
overall sales 4200000*30% 1260000

In 2021, A/R is 30% of sales and bad debt expense is 1800000*5%= 90000.

In 2022, A/R is 35% of sales. We give more on credit because we are expanding our business so, we give
more on credit to increase our customers and bad debt expense is 2240000*5%= 112000

In 2023, A/R is 36% of sales and bad debt expense is 2851200*6%=171072

In 2024, A/R is 40% of sales and bad debt expense is 3456000*6%=207360

Depreciation expense
 The depreciation charge allocated on furniture and equipment assumed as straight line
method.

Equipment:
 150,000/useful life
 150,000/10 = 15000

Furniture:
 60000/10 = 6000
Depreciation expense remains same in all years as we are using straight line method.
Utilities expense:
Under this head the 3 major components internet expense, telephone expense and electricity
expenses all of these costs are approximate costs based on the estimated consumption of all
above. And these expenses in the first year are Rs.35,650 in totality.
In the year 2021, these expenses remain same. In the year 2022 , internet expense, telephone
expense and electricity expense increase by 2650 to 2700,500 to 3500 and 3000.While in 2023
these expenses remain same. In 2024 these expenses increase by 300 in totality.

Advertising expense:
Advertising expenses includes all the expenses associated with the creation and execution of
marketing activities in 2020 which is 250,000. These expenses remains same in 2021 because as
our business start in 2020 so it requires advertising in this year also .While In 2022 expenses
decrease by 30,000 as our business doesn’t require more advertising. These expenses remains
same in 2023 and then decrease by 10,000 in 2024.